MANUEL CHANG AFFAIR

United States ‘greatly disappointed’ in SA decision to extradite former finance minister to Mozambique, not US

By Peter Fabricius 22 May 2019

Manuel Chang, a former finance minister of Mozambique, pictured here in 2014 at the IMF headquarters in Washington DC. Photo: Ryan Rayburn/Flickr

And Mozambican budget watchdog suspects Chang will now evade prosecution for alleged massive corruption.

The US government has expressed “great disappointment” that South Africa has decided to extradite Mozambique’s former finance minister Manuel Chang back to his own country rather than to the US to face massive fraud charges.

And civil society organisations in Maputo suspect that Chang will evade charges in Mozambique for alleged complicity in a huge shipping contract scam which cost the country some US$2-billion.

We urge the Government of South Africa to send Mr Chang to the United States to stand trial for these alleged crimes, which victimised US citizens and robbed the Government of Mozambique of over $700-million,” Robert Mearkle, spokesperson for the US embassy in Pretoria, told Daily Maverick.

Mearkle said the US embassy had noted “with great disappointment” the statement by Minister of Justice and Correctional Services Michael Masutha announcing that Pretoria intended to extradite him to Mozambique. This was “despite having received our formal extradition request before that of the Republic of Mozambique”, Mearkle said.

He added that the US embassy was holding discussions with the South African government and exploring options for a review of the decision.

Chang was arrested at Johannesburg’s OR Tambo International Airport on 30 December 2018 on an Interpol warrant issued on behalf of the US, which also asked Pretoria to extradite him to the US.

There he faces charges with several other suspects of complicity in a US$2-billion fraud and money laundering scheme involving loans to the Mozambique government purportedly to buy fishing and military patrol ships in 2013 and 2014.

The Mozambique government later asked Pretoria to extradite him to Mozambique instead. In April, the Kempton Park Magistrate’s Court ruled that Chang could be extradited to either country, leaving it to Pretoria to decide where he went.

Masutha said in his statement on Tuesday that after considering several factors, including both the US-SA extradition treaty and the Southern African Development Community protocol on extraditions, “I am satisfied that the interest of justice will be best served by acceding to the request by the Republic of Mozambique.”

In Maputo, Jorge Matine, coordinator of the Forum for Monitoring the Budget, expressed doubts that Chang would now face real justice in Mozambique. He noted that Parliament, dominated by Chang’s ruling Frelimo party, had recently refused a request from the country’s Supreme Court to lift the immunity against prosecution which Chang enjoys as a member of Parliament.

He also told Daily Maverick it was odd that South Africa had decided to extradite him to Mozambique when the two countries had no extradition treaty, rather than to the US which did have an extradition treaty with South Africa. He was also puzzled that Pretoria would risk jeopardising its relations with the US by doing this.

He also suggested that the timing of the extradition to Mozambique was politically convenient for Frelimo as corruption and the fraudulent shipping deal, which nearly bankrupted the country, were likely to figure prominently in the October presidential and parliamentary election campaign.

Other civil society watchdogs in Mozambique have more forthrightly stated that, by bringing Chang home, Frelimo would be better able to smother any revelations of corruption by other officials which Chang might reveal if he stood trial in the US.

There are strong indications that more senior figures in the Mozambique government than Chang were also implicated in the huge fraud.

Mearkle said that the US had sought Chang’s arrest and extradition because he was accused of carrying out a $2-billion (nearly R$28-billion) fraud and money laundering scheme that had taken advantage of the US financial system and defrauded US investors.

Chang, 63, was Mozambique’s Minister of Finance from 2005 until 2015. According to the US indictment against him, he conspired with other Mozambique officials, some employees of the Swiss bank, Credit Suisse and an executive of the French-based ship manufacturing company Privinvest to raise US$2-billion in loans, mainly from Credit Suisse but also from the Russian VTB bank in 2013 and 2014 to finance the purchase of a fleet of fishing trawlers and patrol boats for the Mozambique government.

The US charge sheet says the alleged conspirators never intended the shipping projects to succeed and had concocted the whole deal to siphon off the loans into their personal bank accounts. Chang allegedly took US$12-million. The ships are all rusting or otherwise grounded and the Mozambican people never derived any visible benefits from the alleged scam.

In an article for iol.co.za, former Unisa professor of international law Andre Thomashausen has alleged that South Africa’s National Prosecuting Authority (NPA) had “gullibly accepted” a written assurance from the head of Mozambique’s prosecuting authority that Chang’s parliamentary immunity against prosecution had been lifted. Thomashausen said the NPA had conveyed this assurance to the Kempton Park Magistrate’s Court on 8 April 2019, when it was deliberating whether or not Chang could be extradited to Mozambique.

Thomashausen said this assurance was false as the immunity only covered temporary detention for questioning and not prosecution. He said the Mozambican authorities had, after years of inactivity, only opened an investigation into Chang – without charging him- after his arrest in South Africa and the US extradition request.

He said it was likely that, if returned to Mozambique, Chang would be briefly detained for questioning and then released because his parliamentary prosecution would prevent the authorities from prosecuting him.

South African Justice Minister Masutha said in his statement that before making his decision to extradite Chang to Mozambique rather than the US he had considered that he was a Mozambican citizen and that his alleged offence had been committed while he was a Mozambican minister of state.

He had also considered the “onerous debt for Mozambique as a result of the alleged fraud” and Chang’s own request to be extradited to his home country. And he had considered the interests of both the US and Mozambique and the seriousness of the alleged offence.

I have noted that the request by the United States of America was submitted a few weeks prior to that of the Republic of Mozambique,” Masutha said.

However, having considered the matter in its full context, taking into account the criteria contained in both the US-SA Extradition Treaty, on the one hand, and the South African Development Community (SADC) Protocol on Extradition, on the other, as well as the relevant facts, I am satisfied that the interest of justice will be best served by acceding to the request by the Republic of Mozambique.

I have decided that the accused, Mr Manuel Chang, will be extradited to stand trial for his alleged offences in Mozambique.” DM

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